"One recent global study, for instance, found that for every tonne of carbon dioxide they avoid, countries could save an average of $46 in health costs-around twice Australia's starting price for carbon."

The report said coal-fired power cost the nation about $2.6 billion in health costs associated with lung, heart and nervous system diseases each year.

Transport pollution also contributed another $3.3 billion each year to the national health bill, the report said.